As the Hon’ble Finance Minister introduced the 2012-2013 Budget in the National Council today, one of the very first things he highlighted was how the rupee problem has ‘offered us opportunities to develop our domestic industries especially the agriculture sector.’ He stated, “In that sector, in spite of heavy investments in the past, we could never really encourage our farmers to increase their output as products could be simply imported. Today with the difficulty in imports, our farmers are encouraged to produce more, and that has many benefits. For one, rural livelihood is set to become more attractive and the rural-urban migration trend is now seeing the possibility of slowing down. Rural incomes are set to rise, and thus there are bright prospects of the rural poverty levels being reduced. It is appropriate too that now that our rural areas have almost been provided with the basic infrastructure of roads, electricity and communication.”
How do we seize this opportunity to encourage our farmers to produce more, generate more income and address issue of rural poverty? It is not enough to say to our farmers, ‘The rupee problem has created an excellent opportunity. Seize it!’ I expected the Royal Government to allocate more resources to agriculture sector, on which 69% of our people depend for livelihood so that they are able to seize the opportunity.’ For the next one year, the outlay for agriculture sector is 12% of the total Budget amounting to Nu.4,551.294 millions. How does this compare with Budget allocation in the previous years? Look at the following table.
Between the previous (2011) and present fiscal year (2012), the total Budget allocated for agriculture sector declines by 1% amounting to Nu.810.836 million. The outlay for capital expenditure, which is an important investment, gets reduced by Nu.844.728 million. How can farmers seize the present opportunity when the Budget allocation to agriculture sector is slashed down instead of increasing it? How can the Budget ‘promote agriculture production, distribution and marketing’ in order to promote sustainable socio-economic development?
Although 69% of our people depend on subsistence agriculture, that sector has not received priority as other sectors. Therefore, owing to minimal growth, the contribution of agriculture to our GDP has been declining from 55.7% in 1980 to 44.1% in 1990, 32.9% in 2001 and 16.2 in 2010. That is expected when the society urbanizes and other sectors of the economy grow. The fact however, remains that there is minimal growth in agriculture sector. Given the reduced Budget allocation even in this fiscal year, agriculture’s contribution to GDP would decline further both in actual and relative terms. That has direct implication on the subsistence livelihood of our farmers. The question we must ask ourselves is this: Can we develop agriculture sector with a reduced Budget?
Budget Allocated to Agriculture
Fiscal Year Current Capital Amount (in millions) Percentage
2009-2010 Nu.1445.722 Nu.1946.521 Nu.3392.243 11.2
2010-2011 Nu.1559.567 Nu.1988.032 Nu.3547.599 10
2011-2012 Nu.1813.824 Nu.3548.306 Nu.5362.130 13
2012-2013 Nu.1847.716 Nu.2703.578 Nu.4551.294 12
Sonam Kinga is the Deputy-Chairman of the National Council